Section 55A of the Income Tax Act
Income-tax Act, 2025: s.91
Section 55A of the Income-tax Act, 1961 corresponds to section 91 (Reference to Valuation Officer) of the Income-tax Act, 2025.
Read section 91 of the 2025 Act
Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.
The decision most relied on for Section 55A is CIT v. Puja Prints (360 ITR 697), cited in 88 of the 409 judgments on BharatTax that turn on this section.
Leading authorities on Section 55A
The amendment to Section 55A(a) of the Income-tax Act, 1961, which replaced "is less than" with "is at variance" as the condition for referring a valuation to a Departmental Valuation Officer, does not have retrospective effect. Consequently, for periods before July 1, 2012, a DVO reference is invalid if the declared value is not "less than" the fair market value.
When an assessee presents a registered valuer's report for an asset, the Assessing Officer, if forming an opinion that the value claimed is less than the fair market value, must refer the valuation to the Valuation Officer under Section 55A(a). The AO cannot unilaterally reject the registered valuer's report or resort to Section 55A(b) in such a scenario.
The full value of consideration for computing capital gains under Section 48 refers to the amount stated in the sale deed and cannot be substituted by the market value or a valuation by the DVO under Section 55A, unless there is evidence that the assessee actually received a consideration in excess of the stated amount.
The addition of share capital under Section 68 is unsustainable if the Assessing Officer issues summons to investor entities but receives no appearance, relying solely on submissions via DAK, raising doubts about investor identity and genuineness.
The Assessing Officer (AO) is not required to refer the valuation to the District Valuation Officer (DVO) if the AO has conducted a detailed inquiry and is satisfied with the cost of construction. Strict adherence to procedural requirements is essential; failure to comply with mandatory conditions renders the assessment based on such non-compliance invalid.
The Assessing Officer cannot reject a registered valuer's report without providing specific reasons or making a reference to the valuation, and in such cases, the registered valuer's report shall be accepted.
The Assessing Officer cannot reduce the value adopted by the assessee based on a Registered Valuer's report if the value is claimed in accordance with the Registered Valuer's estimate. A reference to the DVO for ascertaining fair market value as on 1.4.1981 was not competent prior to the amendment in section 55A with effect from 1.7.2012.
